In recent years, through high throughput screening technologies that are based on target receptor designs, many new chemical entities (NCE) are identified as bioactive but poorly soluble in water. Due to lack of appropriate formulation approaches a large percent of NCE (~40%) that are poorly soluble in water are abandoned from further development. The traditional approaches to formulate insoluble drugs in an aqueous media for parenteral (iv) use are pH adjustment and use of co solvents/surfactants that normally show vehicle related toxicities. Another major problem in these conventional approaches is undesirable drug side effects due to nonspecific drug exposure to healthy cells and tissues resulting in limited dosing schedule and therapeutic effects of drug. To this end, the focus of this research project is to develop an innovative targeted nanocarrier so that drug solubility, efficacy and safety profile are significantly improved. Our innovative approach harnesses and exploits the attributes of sterically stabilized mixed micelles (SSMM) with surface-grafted vasoactive intestinal peptide (VIP). SSMM are composed of a polyethylene glycol (PEG) conjugated phospholipid and phosphatidylcholine. These mixed micelles can solubilize high concentration of water-insoluble drug in their hydrophobic core resulting in a very high payload at disease site. The presence of a hydrophilic polymer (PEG) on the micelle surface reduces reticuloendothelial system (RES) uptake resulting in longer circulation of these nanocarriers. The nanocarrier, owing to its right size (~15nm), preferentially extravasates into inflammation/tumor sites and targets tissues such as inflammation/tumor due to the leaky vasculature (passive targeting). Furthermore specificity of drug accumulation is further improved using a (targeting ligand-VIP (active targeting). VIP-R is an ideal target because of it's over expression in various cancers. VIP-R exists only in the extravascular compartment and systemic VIP needs to extravasate to reach its receptor. Since VIP attached to the phospholipid micelle (~15nm) cannot extravasate except in regions where the endothelial lining is disrupted, as is in cancer and inflammatory tissues, covalently conjugate VIP to the surface of phospholipid micelles restrict the receptor accessibility only to the targeted tissues with leaky vasculature. VIP on SSMM will not only provide active targeting but also side effect of VIP (significant decrease in systemic arterial pressure) will be totally eliminated. Moreover, association of VIP with phospholipid micelles stabilizes the peptide, protecting it from degradation in biological fluids. In this application, we hypothesize that drug solubility, efficacy and safety profile of a water insoluble drug will be improved by proposed novel nanocarrier, SSMM-VIP. We will also test the hypothesis that internalization of drug loaded carrier through VIP-R will saturate or bypass the efflux pump and overcome drug resistance. We chose breast cancer as a model disease and paclitaxel as a model water insoluble drug to show the feasibility of our proposed innovative targeted nanocarrier. Breast cancer model is ideal to test our hypothesis because of tumor biology, leaky vasculature and VIP-R over expression. Consequently, this novel drug delivery strategy using a safe and VIP receptor targeted nanocarrier can result in delivery of high concentration of the drug to the disease sites with reduced exposure to healthy tissues. Our proposed approach will increase therapeutic index of the drug and its future clinical application can result with a dramatic improvement in the patient quality of life during therapy and improved prognosis after therapy. The specific aims of the project are: 1) Prepare and characterize a targeted nanomedicine (P-SSMM-VIP);2) Evaluate active targeting and cytotoxicity of P-SSMM-VIP in sensitive and multi-drug resistant breast cancer cells;3) Determine in vivo stability, biodistribution and pharmacokinetics of intravenous P-SSMM-VIP in MNU-induced breast cancer bearing rats;4) Determine the efficacy and safety of intravenous P-SSMM-VIP in MNU-induced breast cancer bearing rats. Once the feasibility of this novel targeted therapy is shown in vitro and in vivo on an animal model by the proposed studies, future studies will be designed to translate this approach to the clinics. This approach may also be applied in the future for the targeted delivery of other drugs including peptide/protein drugs and genes to breast and other solid tumors and inflammatory diseases such as rheumatoid arthritis over expressing VIP receptors.